Indian Central Bank Shy Away From Imparting Fiat Status To Virtual Currency Forms

According to the Economic Times,the Central Bank of India, RBI announced that they are searching for fiat cryptocurrencies but not comfortable with privately issued cryptocurrency such as Bitcoin.

The announcement was made today by RBI Executive Director Sudarshan Sen who disclosed facts about the close monitoring of cryptocurrencies by the Reserve Bank of India. Sen said “Right now, we have a group of people who are looking at fiat cryptocurrencies. Something that is an alternative to the Indian Rupee, so to speak. We are looking at that closely”.

With the growing surge in Bitcoin prices and government bodies around the globe implementing the same in various financial services, most people might assume Indian regulators to follow suit. But reality being a far cry, RBI is choosing a route far distant from the Bitcoin and virtual currency driven one.

(Also Read: Notable Growth In The Bitcoin Market in India, says Finance Minister )

Central bank gives the title of fiat currency to any legally issued mode. However in spite of global acceptance, RBI does not feel much at ease around the Bitcoin spectrum. Mr. Sen shared his concerns regarding the same at a recent fintech event organised by KPMG. He considers Bitcoin to be a private cryptocurrency. A currency can be considered fiat when the same can be issued by the Central Bank digitally for being tossed around in cyber space without banking on the use of physical money.

Indian Ministry of Finance announced that they shall be integrating and regulating virtual currencies like Bitcoins and Ethereum after an official committee made the decision of not imparting a legal status to the same.

As per PTI reports, RBI associates risks of money laundering with the virtual currency forms which are extremely susceptible to misuse by fraudsters and terrorists. RBI also clarified that it has not provided any company with requisite authority or license to deal in virtual currencies or operate schemes concerning the same. Thus any investor, holder or trader dealing in the same shall be doing it at their own risk. The Finance Ministry has also set up an inter-disciplinary committee consisting of an RBI representative to look into the regulatory  structure of virtual currencies.

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